JAIIB SPECIME QUESTIONSACCOUNTING & FINANCE
FOR BANKERS MODULE D
1. Select from the following , a statement which speaks about liabilities of an entity.(a) The liabilities consist of claims of the owners(b) The liabilities consist of claims of the owners and outsiders(c) The liabilities consist of claims of the outsiders(d) None of the above2. If the net worth of the business is Rs.500, fixed assets are Rs. 500, current assets Rs.300, investments Rs.300, current liabilities Rs. Nil, what is the amount of claim to outsiders?(a) Rs. Nil(b) Rs. 1100(c) Rs.500(d) Rs.600.3. Select from the following a sentence which is wrong(a) If assets increase and liabilities do not , the capital will increase(b) If assets increase and liabilities also increase by same sum , the capital will remain same(c) A reduction in the amount of assets will amount to equivalent reduction in the net worth(d) An increase in the amount of liabilities with no corresponding increase in liabilities will increase the amount of capital4. The firm sells goods on credit for Rs.50000, the cost of the goods sold is Rs.30000.The effect of the transaction is that, the capital of the firm-----(a) increases by Rs.50000(b) reduces by Rs.40000(c) increases by Rs. 20000(d) reduces by Rs. 20000.5. Mr.Ghatge commenced his business on 1st April, 2006 with Capital of Rs.1,00,000. He did good business during the year and earned handsome profit. At the end of 31st March, 2007, his financial position was: Fixed Assets Rs.1, 20,000 and bank balance of Rs.33000 and Creditors Rs. 17000. What was his net profit for the year 05-06?(a) Rs. 36000(b) Rs.70000(c) Rs.53000(d) None of the above.6. One of the pairs given below is wrong. Select the wrong pair.(a) Outstanding expenses - Nominal account(b) Profit and Loss Account (Dr. balance) – Application of funds(c) Net worth less reserves & surplus - Capital(d) Balance sheet - Financial position7. Choose the sentence which speak about illegal association(a) The unregistered association of 10 persons to do banking business(b) The unregistered association of 50 persons to do non banking business(c) The unregistered association of 20 persons to do business other than banking(d) The unregistered association of 10 persons to do business other than banking8. From the following ,find a sentence which is false in respect of partnership(a) If the partnership is following the “Fixed Capital Account Method” salary payable to a partner is credited to the partner’s current account(b) Drawings made by partners are never entered in the Profit and Loss Appropriation Account.(c) In the “Fluctuating Capital Account Method” the balance in the capital account always remains the same(d) The capital account of a partner is required to be opened in both the Fixed Capital Account Method and Fluctuating Capital Account Method9. From the account given below, select the account which is wrongly included in Profit & Loss Appropriation Account at the debit sidea. Drawings Accountb. Partners Salary Accountc. Interest on Loan Accountd. Commission to Partners Account10. The average net profits expected are Rs.108000 per annum before charging remuneration of Rs. 18000 to partner . The capital employed in the business is Rs.6,00,000. The rate of return expected on capital employed of a firm is 10%. What is the value of goodwill on the basis of two years purchase of super profits.a. Rs.108,000b. Rs.60,000c. Rs.78,000d. None of the above11. A and B are two partners in a firm sharing profits and losses as 2:1. they admitted C as a partner with 25% share in the profits of the firm. Hence , the new profit sharing ratio , after admission of C would be -----(a) 15:15:10(b) 20:10:10(c) 3:1:1(d) None of the above.12. Mr. Q and Mr. R were partners of a firm sharing profit and losses in the ratio of 3:2. They take S into partnership. It was agreed that S will pay Rs.1,00,000 as his share of goodwill which will be retained in business and also bring Rs.3,00,000 as capital for one fourth share in the future profits. The book value of the stock was 41,000 but was to be revalued at Rs.50,000, Accountant has passed following entries, but Mr. Q feels that one of the entry is wrong. Select the wrong entry from the following.(a) Debit cash and credit Goodwill for Rs.1,00,000(b) Debit cash and credit S’s Capital for Rs.3,00,000(c) Debit Goodwill for Rs.1,00,000 and credit Q’s Capital by Rs. 60000 & R’s Capital by Rs. 40,000(d) Debit Stock and credit Profit & Loss Adjustment A/c by Rs.9,000.13. Read the following four journal entries which are passed to consider revaluation of assets and liabilities at the time of admission of a partner. One of the journal entries is wrong, choose the entry which is wrong.(a) For increase in the value of assets-Debit Asset Account and Credit Revaluation Account.(b) For decrease in the value of liabilities- Debit Liabilities Account and Credit Revaluation Account.(c) For Profit on revaluation of assets and liabilities – Debit Old Partners Capital Account in old profit sharing ratio and Credit Revaluation Account(d) For decrease in the value of assets -Debit Revaluation Account and Credit Asset Account14. Any facts, observations, occurrences are called -----(a) data(b) record(c) file(d) system15. In the books of ABC Enterprises, a partnership firm, when Mr. C, a partner decided to resign from the firm, a revaluation of assets and liabilities was done and Revaluation account was prepared which showed the following position: At the credit side of Revaluation Account, Stock A/c Rs.25000, Premises A/c Rs.52000 and Creditors A/c Rs. 8000 were shown while at debit side of Revaluation Account Reserve for Doubtful Debts A/c. Rs.15000, A’s Capital A/c.Rs.20000, B’s Capital A/c. Rs.20,000 and C’s Capital A/c. Rs.20000 were shown. Accountant has interpreted the Revaluation Account as follows. One of the interpretations by him is incorrect. Select the incorrect sentence.(a) Stock is revalued upwardly by Rs. 25000(b) Creditors are revised upwardly by Rs.8000(c) Premises are revised upwardly by Rs.52000(d) A provision on debtors of Rs. 15,000 is made for doubtful debts.16. Select the True statement from the following(a) Interest on drawing is an income to the partnership firm(b) Joint Venture is a permanent partnership firm(c) Goodwill is a tangible asset of the firm(d) In the absence of partnership agreement , partners share profit and loss in proportion to the capital contributed by the partners.17. Select the incorrect statement in respect of companies.(a) A member of a company can enter into contract with a company(b) It is compulsory to register a joint stock company(c) If all but one member of a private company becomes insolvent ,it affects the existence of the organisation(d) Shareholders are not liable for the acts of the company18. Select the incorrect sentence(a) Whenever, there is no profit or inadequate profit, dividend cannot be declared(b) The right to claim dividend lapses when there is no profit in case of cumulative preference shares(c) When the company makes profit , arrears of preference dividend are cleared first(d) The Act prohibits the issue of any preference shares which are irredeemable19. Select the incorrect statement(a) Authorized capital is the capital with which the company is registered(b) Issued capital is equal to its authorized capital(c) Authorized capital, issued capital, subscribed capital, called up capital and paid up capital cannot be same(d) The amount which the company has asked its shareholders to pay is called up capital of the company.20. Following are the journal during the process of application to allotment stage . One of the entries is wrong. Select the wrong entry.(a) Debit bank account and credit share application account ( when application money is received)(b) Debit share application account and credit share capital account (application transferred to share capital account)(c) Debit share capital and credit share allotment account ( for recording allotment money being fallen due )(d) Debit bank account and credit share allotment account ( for receipt of allotment money)21. Select the incorrect statement in respect of calls in advance(a) The company may accept from shareholders , the uncalled amount on shares even before it is fallen due(b) The article of association must permit such acceptance of advance call money(c) Interest on calls in advance can be paid but the maximum is upto 6%(d) The amount of calls in advance is part of the paid up share capital22. Select the incorrect statement in respect of utilization of share premium(a) it is used for the purpose of buy back of shares(b) it used for payment of dividend in case of inadequacy of profits(c) it is used for writing off preliminary expenses(d) it is used for issue of fully paid bonus shares23. Mr. X was issued 100 shares of Rs.10 each. He failed to pay call money of Rs. 5 per share. The shares were forfeited and re-issued to Mr. Y at Rs.9. When the entry recording the re-issue of shares was passed in all, four accounts were affected. The debit and credit effect of these four accounts is given below. One of the accounts is given wrong effect. Select that account from the following.(a) Debit bank account by Rs.900(b) Debit forfeited shares by Rs.500(c) Credit share capital by Rs.1000(d) Credit forfeited shares by Rs.40024. DT Ltd. issued shares of Rs.10 each at 10 % premium, payable on application Rs.2, on allotment Rs.3 (including premium), on first call Rs.2 and on final call Rs.4. One of the shareholders, applied for 100 shares but fail to pay allotment and first call money. At this stage, the said shares were forfeited. Select the account which was wrongly credited.(a) Credit Forfeited shares Account by Rs.200(b) Credit Share allotment Account by Rs.200(c) Credit share premium Account by Rs.100(d) Credit Share first call Account by Rs.20025. Select the source which is not valid for issue of bonus shares(a) Share premium(b) Revaluation reserve created by revaluation of fixed assets(c) Capital reserve(d) Capital redemption reserve26. The liability side of the balance sheet of ABC International Ltd. is showing following position: Paid up share capital Rs.25 Lakh ( 25,000 shares of Rs.100 each fully paid up)Share premium Rs.5 Lakh, Capital Reserve Rs. 3 Lakh, General Reserve Rs. 15 Lakh and Profit & Loss account Rs. 15 Lakh .It was decided to use minimum free reserve for issue of 1:1 bonus shares.. The accounts and the amount with which the account is debited are given below in sets. One of the set is correct. Select the same.(a) Share Premium Account (Rs.5 Lakh), Capital Reserve Account ( Rs. 1 Lakh), General Reserve Account (15 Lakh) & Profit & Loss Account by Rs. 4 Lakh(b) Share Premium Account (Rs. Nil Lakh), Capital Reserve Account ( Rs. Nil Lakh), General Reserve Account (10 Lakh) & Profit & Loss Account by Rs. 15 Lakh(c) Share Premium Account (Rs.5 Lakh), Capital Reserve Account ( Rs. 3 Lakh), General Reserve Account (15 Lakh) & Profit & Loss Account by Rs. 2 Lakh(d) Share Premium Account (Rs.5 Lakh), Capital Reserve Account ( Rs. 1 Lakh), General Reserve Account (4 Lakh) & Profit & Loss Account by Rs. 15 Lakh.27. Select the incorrect statement in case of Share Capital and Reserves and Surplus as shown in the balance sheet.(a) Under share capital, the following order is maintained: Authorised capital, issued capital, subscribed capital(b) The called up amount per share is indicated and in the amount column total amount i.e. number of shares multiplied by amount called up per share is shown(c) The amount of unpaid calls is deducted from (b) above(d) The amount of forfeited shares account is shown under Reserves & surplus28. Select the incorrect statement in respect of form of balance sheet of companies(Liabilities side).(a) sinking fund is shown under unsecured loans(b) Loans and Advances from banks are grouped under the head Secured Loans(c) Unclaimed Dividend is grouped under the head current liabilities(d) Proposed dividend is grouped under provisions.29. Select the incorrect statement in respect of form of balance sheet of companies ( Asset side).(a) Live Stock is grouped under the head ‘current Asset’(b) Balance of unutilized monies raised by issue is grouped under the head ‘Investments’(c) Interest paid out of capital during construction is grouped under the head ‘Miscellaneous Expenditure’(d) Vehicles are grouped under the head ‘Fixed Asset’30. In case any sum has been written off on a reduction of capital or revaluation of assets, each balance sheet subsequent to such reduction or revaluation must show the reduced figures and date of reduction for a period of -----(a) 1 year thereafter(b) 2 years thereafter(c) 3 years thereafter(d) 5 year thereafter31. One of the accounts is wrongly grouped under the head “Investments” while preparing the balance sheet of the company. Single out the wrong account.(a) Investments in government or trust securities(b) Investments in shares ,debentures or bonds(c) Immovable properties(d) Interest accrued on investments32. One of the accounts is wrongly debited to “Profit and Loss Appropriation A/c” of a company. Name the wrong account debited(a) Interim dividend(b) Proposed dividend(c) Provision for tax(d) Capital redemption reserve33. Select the false statement in respect of assets(a) a banking company is allowed to acquire assets for its own use(b) a banking company is allowed to grant loans against the security of assets belonging to its customers(c) a banking company is allowed to take possession of such assets in case of default committed by the borrower(d) a banking company is not allowed to sale the assets against the security of which it has granted loans34. The scheduled banks are required by RBI to transfer at least ------ of their disclosed profit after adjustment/provision towards bonus to staffa. 20%b. 15%c. 10%d. None of the above35. Select the incorrect statement in respect of “ financial Statements of Banks”(a) a banking company is not required to prepare financial statements in accordance with Schedule VI of the Companies Act , 1956.(b) The Act prescribes special forms of balance sheet and profit and loss account for the preparation of its final accounts(c) These are set out in form A and form B of the first schedule to the Banking regulation Act, 1949(d) Form A gives format of a balance sheet and form “B” gives the format of a profit and loss account36. The financial statement of bank consists of ------- schedules(a) 18 Schedules(b) 16 Schedules(c) 17 Schedules(d) Schedules37. Investments, Advances, Fixed Assets and other Assets are part of Schedule Nos.--respectivelya. 6,7,8,9b. 7,8,9,10c. 8,9,10,11d. 9,10,11,12.38. Liability for partially paid investments in respect of banking companies is grouped under the head-----(a) Investments(b) Other assets(c) Other liabilities and provisions(d) Contingent liabilities39. One of the items is a misfit in a group namely ‘other income’ of a banking company. Select this item from the following(a) Income on Investments(b) Profit on sale of investments(c) Profit on revaluation of investments(d) Profit on exchange transactions40. In banking company, matured term deposit to be shown under-----(a) demand deposits(b) saving bank deposits(c) term deposits(d) other liabilities and provisions41. Advances given to a staff by a bank as a employer should be included in-----(a) other assets(b) advances(c) investments(d) none of the above42. 87.Depreciation on bank’s property is part of “Operating Expenses”. Some of the items included under this category are listed below. One of the expenses is wrongly included. Identify that item of expense.(a) depreciation on motor cars(b) depreciation on stationary and stamps(c) depreciation on furniture(d) depreciation on non-banking assets43. Select the correct statement in respect of doubtful debts(a) Which has remained NPA for a period not exceeding 18 months?(b) Which has remained NPA for a period exceeding 12 months(c) Which is considered uncollectible by bank/ internal auditor or RBI Inspection(d) None of the above44. The provisional requirement for standard asset is-----(a) 0.40%(revised) of total outstanding(b) 10%(revised) of total outstanding(c) 40%(revised) of total outstanding(d) 100%(revised) of total outstanding45. The investment under “held to maturity” should not exceed -----of bank’s total investment.(a) 25%(b) 75%(c) 5%(d) None of the above46. The list given below consists of various securities. Identify the security which is SLR security(a) Securities issued by local authorities(b) Shares(c) Bonds(d) subsidiaries47. Acceptances, endorsements and guarantees are shown as-----(a) other assets(b) contingent liabilities(c) advances(d) other liabilities and provisions48. Select the false statement in respect of banking(a) A company accepting deposits for the purpose of lending or investment is a banking company(b) A manufacturing company accepting deposits from the public and some portion of it is lending to its employees as home loans is a banking company(c) A company besides accepting deposits and lending is dealing in goods in connection with the realisation of a security is a banking company(d) A company besides accepting deposits and lending is in the business of collections or negotiating bills of exchange is a banking company.49. The list given below provides the close relationship between the items of each pair. One of the pairs has no such close relationship. Identify this pair.(a) Banking company – trustees and executors(b) Form B - Profit and Loss Account(c) Ledger book - Letter of credit register(d) Other liabilities and provisions - Schedule 550. Choose the wrong pair from the following. The information given in the pair is pertaining to banking companies(a) Reserves & surplus - Share premium(b) Time deposits - Matured time deposits(c) Borrowings in India - Refinance from NABARD(d) Other Liabilities & Provisions - Inter office/branch adjustments(net51. Choose the wrong pair from the following. The information given in the pair is pertaining to banking companies(a) Demand Deposits - Compulsory deposits under excise rules(b) rebate on bills discounted - unexpired discount(c) Operating Expenses Schedule 14(d) Other Income - Profit on sale of investments less loss on sale of investments52. The name of the accounts with the coverage of various items in building that account is given below. One of the items covered in on of the accounts is wrong. Select this account(a) Closing balance of provisions held towards NPA - Opening Balance plus provisions made during the year less write off of bad debts/write back of excess provisions(b) Interest Earned - interest on advances plus income on investments plus interest on deposit with RBI plus income earned by way of dividends from subsidiaries plus discount on bills less unexpired discount(c) Reserves & surplus - Opening balance plus additions during the year less deductions during the year(d) Term deposits - from banks and from Others53. Identify a pair which is mismatch from the following pairs in respect of Company Accounts(a) Miscellaneous Expenditure – Preliminary Expenses(b) Contingent Liabilities – footnote to balance sheet(c) Debentures – Unsecured Loans(d) Outstanding Expenses – Current Liabilities54. Identify a pair which is mismatch from the following pairs in respect of Company Accounts(a) Discount on issue of shares – Profit and Loss Account(b) Bill discounted – contingent liabilities(c) Interest accrued and due on debentures – Secured Loans(d) Mortgage Loan – Secured Loans55. Companies are required to transfer certain percentage of their profit after tax to reserves, to declare dividend. The various rates of transfer based on the rates of dividend are given below in pair. Select the wrong pair.(a) Rate of dividend exceeds 10% but not 12.50- Transfer to reserve @ Nil%(b) Rate of dividend exceeds 12.50% but not 15%- Transfer to reserve @ 5%(c) Rate of dividend exceeds 15% but not 20%- Transfer to reserve @ 7.50%(d) Rate of dividend exceeds 20% - Transfer to reserve @ 10%56. While preparing the final accounts of the company, the adjustments [(i) to (iv)] are to be made by passing necessary entries. One of the entries passed is wrong entry. Select the wrong entry.(i) Depreciate plant ,WDV of which is Rs.3,30,000 at 15% (ii) Write off Rs.5,000 from Preliminary Expenses (iii) Half years debenture interest due (12% debentures of Rs. 3,00,000) (iv) a claim of Rs. 25,000 for workmen’s compensation is disputed by the company.(a) Debit Depreciation on plant by Rs.49,500 credit plant by 49,500 AND Debit Profit & Loss Account by 49,500 and Credit Depreciation on plant by 49,500(b) Debit Profit and Loss Account by Rs.5,000 and Credit Preliminary Expenses(c) Debit Debenture Interest by Rs.18,000 & Outstanding Liability for Deb. Interest by 18,000 AND Debit Profit and Loss Account by Rs.18,000 and Credit Debenture Interest by Rs.18000(d) Debit Wages by Rs.25,000 & Credit Outstanding Liability for Workers compensation AND Debit Profit and Loss Account by Rs.25,000 and Credit Wages by Rs.25,000.57. While preparing the final accounts of the company, the adjustments [(i) to (iv)] are to be made by passing necessary entries. One of the entries passed is wrong entry. Select the wrong entry.(i) Provide dividend 5% of paid up share capital (Share capital of Rs. 5,00,000 consisting of shares of Rs. 10 each fully paid) (ii) Insurance for unexpired period is Rs.2000 (iii) A provision of Rs. 25,000 is to be made for income tax (iv) a provision of Rs. 5000 is to be made for doubtful debts(a) Debit Dividend by Rs.25000 & Credit Bank by Rs.25000(b) Prepaid Insurance by Rs.2000 & Insurance by Rs.2000(c) Debit Profit & Loss Account by Rs.25,000 & Credit Provision for Tax by Rs.25,000(d) Debit Profit & Loss by Rs.5,000 & Credit Provision for doubtful debts by Rs.5,000.58. In respect of asset side of the balance sheet one of the items is presented in a proper order, rests are disorderly. Select the orderly presented item from the following.(a) Investments, Fixed Assets, Current Assets & Loan Advances, Profit & Loss Account(Dr. balance), Miscellaneous Expenditure(b) Fixed Assets, Investments, Current Assets & Loan Advances, Profit & Loss Account(Dr. balance) , Miscellaneous Expenditure(c) Fixed Assets, Investments, Current Assets & Loan Advances, Miscellaneous Expenditure, Profit & Loss Account(Dr. balance)(d) Fixed Assets, Current Assets & Loan Advances, Profit & Loss Account(Dr. balance), Miscellaneous Expenditure59. One of the statements in respect of Profit & Loss Adjustment account is incorrect, rest are correct. Mark the incorrect sentence.(a) The account is credited with closing balance of profit and loss account of last year(b) The account is credited with current year’s net profit(c) The account is debited with provision for taxes(d) The account is debited with provision for dividend60. The two portion of each pair relating to partnership accounts has got some relationship. However one of the pairs is a mismatch and has no relationship. Select this pair from the following(a) Management of business - business may be run by one or some or all partner(b) Treatment of losses - insolvency of a partner(c) Loan from partners - No interest as partners are owners(d) Goodwill - super profit method61. The two portion of each pair relating to admission of a partner has got some relationship. However one of the pairs is mismatch and has no relationship. Select this pair from the following(a) Admission of a partner - gain ratio(b) Reserves & surplus - Old partners(c) Goodwill - new partner(d) Revaluation of assets & liabilities - Profit & Loss adjustment account62. The two portion of each pair relating to retirement of a partner has got some relationship. However one of the pair is mismatch and has no relationship. Select this pair from the following(a) Retirement - voluntary action(b) Gain - retiring partner(c) Share of goodwill - borne by continuing partners(d) Reserve & surplus - belong to all partners63. If the partners capital accounts are fixed, where will you record (either debit side or credit side of which account ) the following transactions (i) Salary payable to partner (ii) Fresh capital introduced by a partner (iii) Drawing made by a partner (iv) Share of profit earned by a partner. The effect to one of the journal entries is wrongly given. Identify that account from the following.(a) Debit side of partner’s current account(b) Credit side of partner’s capital account(c) Debit side of partner’s current account(d) Credit side of partner’s current account64. L,K and P are partners. The following differences as listed at (i) to (iv) have arisen due to misunderstanding. The answer to each point is given at (a) to (d). One of the solutions is incorrect. Identify the wrong solution. (i) L used Rs.25,000 belonging to the firm and made a profit of Rs.4,000. K wants the amount to be given to the firm (ii) P used Rs.10,000 belonging to the firm and suffered a loss of Rs. 3000. He wants the firm to bear the loss (iii) L & K wishes to appoint S as new partner. P does not agree (iv) L has given loan of Rs. 50,000 to the firm, he wants interest at 6% ( there is no partnership deed)(a) K is right .L must pay Rs.29,000 to the firm(b) P is right . Firm should bear profit as well as losses.(c) P is right. No new partner can be admitted without the consent of all.(d) L is right. He is entitled for interest at 6% in the absence of partnership agreement.65. Below are some statements about partnership. One of them is correct, identify that statement.(a) Partnership arises from reputation(b) A partnership is formed only for a legal business(c) The liability of partners is limited(d) The business of the firm is conducted by two partners66. O and P are two partners sharing profits in the ratio of 7:3. They admit Q into partnership as a partner from 1st April 2006 on 3/7th share in the profit. What is the new profit sharing ratio(a) 14: 6 : 15(b) 7: 3: 3(c) 2: 2: 3(d) None of the above.67. A firm earns Rs.10,000 as its normal profits. The rate of normal return being 10%. The assets of the firm amount to Rs.72,000 and liabilities to Rs.24,000. Find out the value of goodwill.(a) Rs.52,000(b) Rs.1,00,000(c) Rs.28,000(d) Nil.68. When a new partner gives cash for goodwill, the amount is credited to-----(a) Goodwill account(b) Capital account of new partner(c) Cash account(d) None of the above69. If the goodwill account is raised for Rs.50,000, the amount is debited to-----(a) The capital accounts of partners(b) Goodwill account(c) Cash account(d) None of the above70. A and B sharing profits and losses in the ratio of 2:1. C is admitted as partner giving him ¼ share. The new profit sharing ratio will be-----(a) 2:1:1(b) 4: 4:3(c) 3: 3: 2(d) None of the above.71. If the adjustment in the values of assets at the time of the admission of a partner shows a profit, it should be credited to the capital accounts of-----(a) The old partners in their new profit-sharing ratio(b) All partners in their new profit sharing ratio(c) The old partners in their old profit sharing ratio(d) None of the above72. A, B and C are three partner sharing profits in the ratio of 3:1:1. C retires and his share is purchased by B. the new profit sharing ratio shall be-----(a) 3:1(b) 7:3(c) 3:2(d) None of the above.73. On the retirement of the partner, the profits on revaluation of assets should be credited to the accounts of-----(a) All the partners in their profit sharing ratio(b) The remaining partners in their new profit sharing ratio(c) The remaining partners in their old profit sharing ratio(d) None of the above74. A, B and C share profits as 3:2:1. C retires. Calculate the gain ratio of A and B(a) 3:2(b) 1:1(c) 2:1(d) None of the above.75. Choose the incorrect statement in case of dissolution of partnership from the following statements(a) On the dissolution of the firm , first creditors like wages outstanding etc. will have to be paid(b) Goodwill will be raised in the books when a firm is dissolved(c) The loan from the spouse of a partner is treated just like a loan from outside parties(d) After the books are closed, no account will show any balance.76. Choose the incorrect statement from the following statement which are pertaining to company accounts(a) The company is an artificial person(b) A member of a company may bind the company by its actions.(c) The shareholders are not liable for the acts of the company(d) The premium received on shares may be distributed among shareholders.77. A new company cannot issue shares-----(a) at par(b) at discount(c) at premium(d) none of the above78. A company wishes to pay dividend on shares. State which of the following may be used for the purpose.(a) Premium of shares(b) Profit on re-issue of forfeited shares(c) General Reserve(d) None of the above79. If Rs.10 share has been issued at a premium of Rs.5, on which entire amount has been called up, has been forfeited for non payment of Rs. 4, the ‘Share Capital Account’ will be debited by-----(a) Rs.15(b) Rs.10(c) Rs.4(d) Rs.6.80. Money received in advance from shareholder before it is actually called up by the company is -----(a) Debited to Calls in arrears Account(b) Debited to Calls in Advance Account(c) Credited to Calls in Advance Account(d) Credited to Share Capital Account81. If a share of Rs.10 issued at a premium of Rs.1 on which Rs.9 ( including premium) have been called and Rs.7( including premium) paid is forfeited, the capital account should be debited by-----(a) Rs.8(b) Rs.10(c) Rs.9(d) Rs.7.82. Dividend are usually paid on(a) Called up capital(b) Paid up capital(c) Authorised capital(d) None of the above83. Preliminary Expenses is-----(a) Fictitious Asset(b) Current liability(c) Current asset(d) None of the above84. A and B are partners sharing profits in the ratio of 3:2. C is admitted as a partner. The new profit sharing ratio among A, B and C is 4:3:2. Find out the sacrificing ratio(a) 7:3(b) 4:3(c) 1:1(d) None of the above.85. Choose the correct treatment for premium paid on ‘Joint Life Policy’ when premium paid is treated as an expense.(a) Premium amount is debited to P & L account every year and when claim becomes due then to be shared by all partners(b) Every year amount debited to Joint Life Policy Account and balance is shown on asset side at surrender value . The difference between surrender value and premium paid is written off to Profit and Loss account(c) Joint Life Policy and Joint Life reserve Account are adjusted to bring them down to surrender value of policy.(d) None of the above.